The Workplace Parking Levy: a wasteful stealth tax3

Today the Secretary of State for Transport, Sadiq Khan, gave the go-ahead for the introduction of a Workplace Parking Levy (the Levy) in Nottingham. The Levy, to be introduced in 2012, is the UK’s first tax on parking spaces. Initially; it will place a charge of £185 on businesses that have more than 11 parking spaces, this will nearly double in 2014 to £350. This will place a substantial tax burden over 500 firms when it is introduced and employers will almost certainly pass this cost onto their employees.

The scheme is being put in place to fund the extension to the NET, a tram service that operates in central Nottingham. The extension will extend the tram network to the areas of Chilwell, Beeston, and Clifton, and is expected to cost the taxpayer at least £680m. The Government had originally planned to provide £300m (75%) of the costs but later reneged on this promise. Funding will now come entirely from Nottingham City Council via the Levy.

The Levy is being introduced despite opposition from locals and local Councillors. Cllr. Jackson of Chilwell and Toton argues that a tram extension is “not needed for Beeston and Chilwell”. But it is not just locals who are against the introduction of a parking tax. David Frost, director of the British Chambers of Commerce, warned that If councils go ahead with it, “companies and employees will be hit hard at a time when they least need it". This mirrors the view of Edmund King, President of the AA, who accurately noted that this noting more than a “tax on work”. The best course of action for any Government in a recession is to cut unnecessary expenditure and ease the tax burden on those who are most likely to steer us out of a downturn, businesses. Sadly for Nottingham, firms that are headquartered in Nottingham, like Experian, Capitalone and Boots, are likely to relocate, downsize or cease expansion.

The more frightening possibility though, would be if this grand folly was rolled out on a national scale. Rough estimates put the potential cost to UK businesses at £3.4 billion. The Core Cities group (Birmingham, Manchester, Bristol, Leeds, Liverpool, Newcastle and Sheffield) has already expressed an interest in adopting the Levy. This would place an additional tax burden on a work force of approximately two million people.

The WPL is being touted as a crucial weapon in the battle against climate change. But it is hard to envisage how this could be true in any meaningful way. The extent to which the Levy will ultimately reduce carbon emissions is negligible. Part-time night workers, of whom very few will have access to public transport, will be forced to pay the tax. More importantly, the Levy will be in place for at least two years before the new tram network is up and running. Therefore, those living in those areas without adequate access to public transport, which includes those who will remain without public transport after the NET extension, are likely to be unfairly penalised.

The Levy is nothing more than a stealth tax in green clothing. The Government has conveniently pushed the introduction of the Levy back to 2012, after the next election, and you can bet your cotton socks that once the tram extension is complete the Levy will remain in place. This stealth tax is here to stay.

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Adam Wildman
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